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Binary Options Do's and Don'ts

Updated on June 12, 2012

Binary Options- It's a pretty new trading system created for investors. Returns can be 70%-85% or more within 1 hour! Sounds great, right? Sure it is, but there are many things you should be aware of before attempting to invest in binary options. Some binary options are cash or nothing and some are asset or nothing.

The cash binary options will give you a certain amount returned if you are "in the money" at the time of the expiration. The asset or nothing option basically gives the trader a certain percentage if the is above or below the strike margin during the expiration time. depending on your pick) Either type of binary option you are aware of the gain/losses and that is a plus for binary options.

I know this all may be very confusing, but I would suggest reading this blog first. Then you may want to set up a demo account before actual trading to get a feel for binary options. I am going to give you some tips that will help you know what to accomplish before trading and things you should stay away from.

If there is one thing I have learned about trading; it is to be careful, be very careful. Have you ever invested your money into the stock market? If not, then this is something you surely want to read prior to taking that leap of faith. First, is it something you want to stay away from? No and Yes. Yes, if you are addicted to gambling and go with your gut instinct all the time. No, if you can control your emotions and don't have that gambling mind.

Let's get started. One of the first things to do is realize that starting off with only a small amount isn't always wise. It may feel more comfortable to you but the smaller the investment the higher the risk. Sounds crazy right? However, if you deposit $100 and the minimum you can trade is $10 then you are risking 10%! That is a lot. However, let's say you deposit $1000 then your only risking 1%. Once you realize the risks involved then be sure you have the funds for investing.

After you are sure you have the funds for investing; it is time to choose a stock brokerage platform. There are many out there so research, research, research. Some of the things you want to look for is the platform targeted and does it apply to you. Many platforms are diverse and target both experienced and unexperienced investors. However, some are looking for more experienced investors only. Security and Regulatory guidelines is a crucial part of finding the right broker. Whatever country you are in should have a corresponding regulatory body and you want your broker meeting those requirements.

Next, is withdrawals and deposits. You want to be sure that withdrawals and deposits will not be problematic. It should be simple and straight to the point. You want to find out the minimum deposit and the minimum withdrawal. (the maximum as well) Be sure to look into the allowed number of transactions of each too. Some platforms will charge you after the first withdrawal or after a certain amount. Another thing to pay close attention to is the trade amounts. What is the lowest/highest amount your are limited to for each trade. Most start around $10, but some are less/more per trade.

Another tip is to look out for tools that the platform offers. Does it offer you news updates? How about charts and technical tools for the charts? Some brokerage platforms have twitter updates and reports. Is your platform of choice user friendly? The appearance should be easy for you to figure out and shouldn't be difficult. Also, last but not least is customer service. After you choose a platform the customer service should be consistent and shouldn't disappear. If you are not regularly informed of what is going on then I would suggest jumping ship and taking your money elsewhere.

When your first start to invest be sure you have already studied up on the markets, the history, and current statis of markets. Know how to read charts. There are different types of charts and indicators out there so be sure to find one that is good for you. This may be trial and error because what works for one person may not work for another. Learn the market terminology and definitions. Be prepared.

Even when you think you are ready it can be quite difficult to make the money you dream of. Some people will tell you that it is so easy. Don't listen to the lies. I am here to tell you that it is not that easy. If it was that easy, don't you believe everyone would be trading? Sure they would. Be careful when you do pick a brokerage not to fall for typical sales pitch calls/emails. Be thoughtful and wise when your brokerage offers you bonuses and wants you to deposit more of YOUR money. Read every detail of bonuses and ask questions!

Last of all some brokerage platforms will offer more help to those that invest more. I know it doesn't seem fair but that is the way the work just like most companies. Remember what I said about investing a larger amounts in the beginning? If you do invest a larger amount be sure you can get some professional help from your brokerage. If the platform does not offer trading help then don't use them. Be sure that you don't ever risk more than you are willing to loose. I know you don't want to loose any money but don't invest if it will hurt you badly to loose it all.

Hopefully, you have some insight into the binary option world by now and you will make wise decisions. Peace, love, and blessings!


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